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Wednesday, 4 February 2009
Page: 297

Ms RISHWORTH (6:48 PM) —I am very pleased to rise to support the six bills before us, the Appropriation (Economic Security Strategy) Bill (No. 1) 2008-2009 and cognate bills, which combined make up the Rudd government’s second stimulus package. It was very interesting to hear the member for Higgins talk about his prediction of the global financial crisis not last year but the year before. In fact, he knew about it when he, with Mr Howard, came up with the ‘Go for growth’ slogan. The only issue is that the member for Higgins forgot to tell the rest of the world that the global financial crisis was coming.

The legislation before us today is critical for the difficult world economic circumstances that face our nation. The $42 billion Nation Building and Jobs Plan adds to the economic security package announced in October last year. Despite the ill-founded waffling of the opposition, the Economic Security Strategy announced in October last year did have a positive impact on demand in targeted areas of the economy, including retail. In my electorate, evidence from those in the building industry indicates that the percentage of first home owners purchasing newly constructed houses has increased from eight per cent two years ago to 25 per cent since the introduction of the first stimulus package, suggesting that first home buyers, who had previously been excluded from the market, have been able to fill the void left by investors as a direct result of the first stimulus package.

Since the announcement and delivery of the Rudd government’s first economic stimulus package, the outlook for the global economy has deteriorated significantly, with the International Monetary Fund now forecasting a deep global recession. The global slowdown has driven almost all major advanced economies into recession, including those of the United States, the United Kingdom, Japan and Europe. In addition, growth forecasts for one of our major trading partners, China, have halved.

Australia has not been immune to the unfolding global financial crisis. This global crisis has already had an impact on Australia’s projected economic growth, unemployment and government revenue. Faced with this situation, the Australian government has a choice. The first option is to do nothing and let markets do their worst. The second is to act now to support jobs and growth. It seems that the opposition favours the former, doing nothing, despite this being contrary to advice from the International Monetary Fund and other international organisations and inconsistent with action taken by other countries around the world. The Rudd government is committed to the latter—that is, when the markets have failed, the government must intervene to support jobs and growth. The government is committed to action, and it is committed to an action that has been widely supported by economists and peak business associations alike.

The package before us today outlines our plan to stimulate our economy, to support jobs and families and, in doing so, to invest in the long-term future of our nation. The package is made up of two broad areas: direct payments to householders, worth approximately $12 billion, and investment in infrastructure, worth around $30 billion. The government will provide to householders a one-off cash bonus for those paying tax who earned up to $100,000 in the 2007-08 financial year. This payment will be made to each and every taxpayer. In addition there are a number of other bonuses. A back-to-school bonus will provide an upfront payment of $950 for families on family tax benefit A for each eligible school-age child, to assist with the costs associated with going back to school. In my electorate of Kingston, this payment will assist approximately 13,000 families. Further assistance of a $950 bonus will be paid to those families on family tax benefit B, to farmers experiencing hardship and to those receiving the education entry payment. These payments are designed to provide an immediate stimulus to the Australian economy.

As I said in the introduction, a large component of this package is to invest in the nation’s infrastructure. In particular, a large part of the package is to invest in our nation’s schooling infrastructure. As I have gone around my electorate, school principal after school principal has indicated to me that they believe they provide a world-class education and have many dedicated staff and a committed school community. However, many have indicated to me that it is their buildings that have let them down, that it is their physical environment that holds their school back. Therefore, I am extremely pleased that the package before us today provides a huge investment to equip our schools for the 21st century. This package will provide all primary schools with the opportunity to build libraries, halls and gymnasiums or to do classroom refurbishments and provides secondary schools with the opportunity to build science labs and learning centres.

The opposition has argued on and on today that this package before us is not investing in our children’s future. However, most sensible people do understand—even if the opposition does not—that there is no better or more direct way to invest in our children’s future than by investing in their education, and that is exactly what we are doing. As the Prime Minister has stated, not only will we be investing in the future of our kids, but every school will be a centre of economic activity, supporting local building and construction jobs.

In addition, the package provides investment in other critical infrastructure, including building social housing, aimed at lifting the quantity of public housing stock—working towards this government’s very admirable aim of halving homelessness by 2020—and investing to provide safer roads by fixing black spots, fixing regional roads and installing boom gates. The Nation Building and Jobs Plan also invests now to help householders adjust to a carbon restrained future by providing insulation to those who do not have it. This package also provides assistance to small business in the form of an investment allowance for small business.

The spending in this package will affect the budget bottom line. As announced on Monday, government revenue has sharply declined as a result of the global recession and a temporary budget deficit is unavoidable. However, in these extraordinary times, a temporary budget deficit is the responsible course of action to protect jobs and growth. The course of action that the government proposes has been both advocated by the IMF and supported by Australian business groups and economists. However, despite the current need for a temporary budget deficit, this government is committed to returning the budget to surplus and has a plan to do this. We have made a commitment that, when growth returns, this government will allow tax revenue to recover naturally and we have committed to capping spending in order to pay off this temporary deficit.

We have heard some members of the opposition say that they would prefer, rather than the targeted package we are proposing, an unspecified number of tax cuts to stimulate the economy. Apart from the fact that this approach has been discredited and would not provide the immediate stimulus necessary, it would also plunge the budget into long-term structural deficit. So the opposition is advocating a deficit that is much more long-term than the temporary deficit that this government is advocating. Today the opposition announced that it opposes this package, showing that the Liberal and National parties prefer to have their heads in the sand rather than face these serious economic times and are focusing on cheap political point scoring rather than thinking about the welfare of the Australian people.

This country is facing the deepest global recession since World War II. We must act now if we want to reduce the impact of this global recession on Australia. We need to stimulate our economy, and the plan before us today does just that but also invests in our nation’s long-term future, which will provide benefits not only today but also for years into the future. Therefore, I do commend the bills to the House.